TT Club Works Toward Safer Supply Chain

Posted by Michelle Howard

Friday, November 08, 2013

Freight transport insurance specialist TT Club said it is continuing its efforts to reduce risk in the supply chain. Through constant analysis of the claims it receives, the international insurer has pinpointed an array of operational circumstances that more commonly cause dangerous incidents resulting in bodily injury, sometimes death, and significant loss and damage to cargo, equipment and property.

Following in a series of presentations at industry gatherings, by which the club seeks to draw attention to such causes and advises on steps to improve safety, the latest effort was at a meeting last week in Hong Kong of members of the Japanese International Freight Forwarders Association (JIFFA) and hosted by the Hong Kong Japanese Chamber of Commerce & Industry.

Giving the presentation, TT Club’s Regional Director Asia-Pacific, Phillip Emmanuel commented, “The picture is very clear, the overwhelming majority of claims, some 95% of those we’ve analyzed had causation that involved the human factor including operational causes and those related to maintenance (or lack of it); the remainder being down to weather events.”

The TT Club has for some time now been emphasizing the need for operators to take more account of the human factor in their risk mitigation programs. “There is so much that can be achieved in reducing claims at ports, terminals and throughout the physical supply chain by establishing more robust training programs for truck drivers and equipment operators as well as warehouse and terminal personnel, who are involved in cargo packing as well as container and truck movements,” highlighted Emmanuel.

Such training would help in reducing incidents that are caused by bad handling and stowage, which together make up nearly a third of those classed as systems and process issues in the TT Club analysis. A further 40% or more of these issues were caused by errors that might be avoided had a more disciplined checking system been applied; these include clerical and contractual mistakes, incomplete customs declarations and the release of cargoes without receipt of the appropriate documentation.

Emmanuel also stressed that good management should include the provision of physical devices to enhance safety and security. Extending beyond fencing and CCTV at terminals and warehouses to prevent theft, these may include anti-collision devices to avoid handling equipment accidents and regular maintenance using high quality spares to reduce the risk of fires.

As a final plea to transport operators, the club highly recommends a detailed due diligence procedure be adopted and carried out when employing sub-contractors for transport services. TT’s analysis reveals that of the costs accruing from theft, 66% occur either when carried by a sub-contractor or from a contractors’ premises. “The phrase ‘know your contractor’ should be the guide for all transport operators seeking to protect themselves from the consequences of cargo theft,” Emmanuel concluded.